The Gibraltar Betting and Gaming Association (GBGA) has written to the UK government and Gambling Commission to declare its intention to challenge the new Gambling (Licensing and Advertising) Act 2014.
The organisation, which represents Gibraltar-based online gambling operators, instructed law firm Olswang to contact Secretary for Culture, Media and Sport, Sajid Javid, attorney general Dominic Grieve and the UK Gambling Commission in order to spell out its concerns over the Act.
Under the new Act, which was given Royal Assent by the British monarchy last month, all remote gambling operators in the UK market are required to obtain a licence from the Gambling Commission to allow them to transact with British customers and advertise in the UK.
Overseas operators are also required to inform the Gambling Commission about suspicious betting patterns to help combat illegal activity and corruption in sports betting.
In addition, operators based outside of the UK will be required to pay and contribute to research, education and treatment in relation to British problem gambling and regulatory costs.
The GBGA has argued that the new law is unnecessary and will open up the UK market to operators based anywhere in the world – some of whom will not obtain a licence.
The Gibraltar organisation also said that the new regime would effectively require the Gambling Commission to police the online gambling sector on a worldwide basis.
“This is bad for UK consumers, bad for the regulated industry, bad for Gibraltar and is in breach of European law, but fantastic news for operators who choose to avoid proper regulation,” GBGA chief executive Peter Howitt sad.
“We know of no precedent where any regulator in any industry will be granted the role of licensing and regulating operators all over the world in this way, threatening to criminalise companies and people who fail to submit to its regime. This is plainly unworkable.
“The likely impact of this legislation will be to drive UK consumers towards unregulated or poorly regulated operators, leaving them exposed to unnecessary risks.
“This Act allows operators from 165 new jurisdictions to gain licences to operate and advertise in the UK and the Gambling Commission is supposed to regulate this industry with no extra-territorial information gathering or enforcement powers.”
In letters before action, Olswang said that the new licensing regime established under the act breaches Article 56 of the Treaty on the Functioning of the European Union and is unlawful.
Olswang partner Dan Tench said: “The measures introduced through this Act are neither reasonable nor proportionate to achieving that goal and are likely to have adverse consequences for consumers.
“All this Act achieves is a wholly unjustified, disproportionate and discriminatory interference with the right to free movement of services, a right enshrined in European Law. For these reasons the Government must reconsider this law or we shall have no option but to ask the courts to review it for them.”
The GBGA also noted that Gibraltar already has its own recognised regulatory regime and that a more effective means to promote consumer protection was rejected by the government without proper consideration or explanation.
The proposal, which is known as ‘Passporting’ would ensure highly experienced and effective local regulators retain responsibility for licensing their domestic industry, but at the same time work with and share information with the Gambling Commission on a formally structured basis.
